The German Federal Cartel Office has charged Apple with abusing its market power by leveraging its App Tracking Transparency (ATT) feature to give itself an unfair advantage. A three-year investigation concluded that ATT, while ostensibly designed for user privacy, hinders competing app publishers from accessing crucial advertising data. This could lead to significant daily fines for Apple if the company fails to adjust its practices.
Apple’s ATT feature, introduced in 2021, allows users to opt out of cross-app tracking by advertisers. While Apple maintains that the feature empowers users to control their privacy, companies like Meta Platforms, along with various app developers and startups, argue that it disrupts their advertising-based business models. Federal Cartel Office President Andreas Mundt stated that ATT significantly restricts competitors’ access to valuable user data for advertising purposes.
In response, Apple defended ATT, asserting its commitment to higher standards than those required of third-party developers. The company reiterated its dedication to user transparency and data control and pledged to continue engaging with the Federal Cartel Office. However, Apple now faces the obligation to address the concerns outlined in the charge sheet. Failure to do so could result in further legal action and substantial daily fines, with a final ruling anticipated within the next year.
The case originated from complaints lodged by associations representing a broad spectrum of stakeholders, including publishers, broadcasters, advertisers, advertising agencies, and ad tech companies. Thomas Höppner, a partner at the law firm Hausfeld representing the complainants, hailed the charges as groundbreaking. He argued that Apple’s actions created artificial opacity, limiting choices, increasing app costs, reducing protection against ad fraud, and ultimately boosting Apple’s service revenues. Höppner emphasized the significance of the charges in establishing that Apple cannot use privacy as a pretext to stifle competition.
This antitrust case carries substantial weight, as companies found in violation of German antitrust regulations can face fines of up to 10% of their annual global turnover. The outcome of this case could significantly impact Apple’s business practices and the broader mobile advertising landscape. The Federal Cartel Office’s decision will set a precedent for how tech giants manage user data and balance privacy concerns with fair competition in the digital marketplace. Apple’s response and subsequent actions will be closely monitored by industry players and regulators worldwide.
